A car accident is one of the worst nightmares of any car owner, as it brings with it monetary damages and a lot of stress. Thanks to the Motor Vehicles Act, 1988, car insurance is mandatory in India and most of the expenses are taken care of by the insurance companies. However, in many instances vehicle owners find their motor insurance claims rejected and are left high & dry, bearing huge expenses out of their own pockets.
Auto insurance providers have often been criticised for rejecting claims to avoid a hefty payout. However, that’s not the case always! A lot of car insurance claims are rejected due to negligence and mistakes of the policy owners.
Here are a few important oversights (intentional & unintentional) that can lead to motor insurance claim rejection:
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Driving under the influence (DUI)
Driving Under the Influence or DUI can drag you into a world of trouble as it is not only a reason for car insurance claim rejection but also a prosecutable crime. Be it alcohol or banned/controlled substances, any indication of their use while driving leads to instant rejection of your motor insurance claim. Besides the claim rejection, you might even find yourself facing a lot of legal heat leading to fines, imprisonment or even both. Bottom line: “Don’t Drink & Drive!”
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Driving without a valid driving licence
Driving without a valid license is a punishable offence and can lead car insurance claim rejection straightaway. In case of an accident, you won’t even be able to raise a claim with your insurance provider if you’re found without a proper driving license. Not only you will lose out on the motor insurance claim but also likely to be fined a minimum of ₹5,000.
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Delay in reporting the accident
An intimation to the car insurance service provider at the earliest is the best thing to do when filing for claims. Most insurance companies offer a grace period for the reporting process, but it’s always better to intimate the company ASAP. Delay in the accident reporting leads to a more complicated car insurance claim settlement process and often results in 100% claim rejection as well.
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Policy in someone else’s name
In numerous cases, drivers are often found with car insurance policy papers in someone else’s name. Although a few drivers turn out to have done so intentionally, many are found to be simply careless or forgetful.
This primarily happens in the case of used or second-hand cars. Ensure that you transfer the existing car insurance policy as well as the registration certificate (RC) in case of second-hand cars. In the event of a car accident, the insurance provider reserves the right to reject your auto insurance claim if your name is different on the policy papers.
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Use of vehicle beyond the geographical limitations
The Insurance Regulatory & Development Authority (IRDA) has divided the metro cities and other Indian regions into two separate zones to make it easy for policy owners to file for a claim.
Zone A is for the metros and Zone B for the rest of the country. Depending upon the zone covered under your car insurance policy, you are entitled to make a motor insurance claim in that particular zone.
However, if an accident takes place in the non-covered zone, then your insurance claim is liable for rejection. For example, if the accident occurs on foreign soil, such as the Maldives, Sri Lanka or Pakistan, then your auto insurance claim will be rejected.
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General wear and tear
Your vehicle is bound to experience wear and tear over time with continuous use. While this is inevitable, it’s still not covered by your car insurance.. Even if you have opted for a comprehensive car insurance policy, any motor insurance claim against wear and tear is bound to get rejected.
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Uninformed repairs
Any repairs made to your vehicle without notifying the insurance company will not be covered under your motor insurance policy. In the event of an accident, you are obligated to inform the insurance provider about all the damages to get approval for the claim made. In such a scenario, a designated inspection officer takes stock of the damages and only then the repairs and the claim process begins.
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Reckless/dangerous driving
Driving in an off-road terrainof or cramming your vehicle till it’s over loaded? If you misuse your vehicle in such a manner, then be prepared for an instant claim rejection. Whether the damages are incurred due to misuse or reckless driving, any insurance claim arising from such an act will be rejected.
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Unlisted accessories and modifications
At the time of renewal, , it’s wise to declare all modifications made to your vehicle.. Any changes unlisted with your insurance providers can lead to motor insurance claim rejection if made against the said modification; be it accessories or efficiency add-ons, i.e. a CNG kit, intimation to the insurance provider is a must.
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Personal to commercial use & vice-versa
Driving personal vehicles for commercial purposes, or vice-versa, is a gross violation which is not only punishable under the law but also nullifies your car insurance claim. While many personal vehicles are used for commercial purposes, yet this usage can easily get your insurance claim rejected. Also, you might find yourself in legal trouble that can lead to a substantial fine as well.
We intend to educate you on car insurance and help you avoid claim rejections. Keep your motor insurance updated, adhere to the rules, drive safely and avoid all the above-mentioned points to ensure that your car insurance claim doesn’t get rejected.